Correlation Between CVW CleanTech and NESNVX

Can any of the company-specific risk be diversified away by investing in both CVW CleanTech and NESNVX at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CVW CleanTech and NESNVX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CVW CleanTech and NESNVX 4 12 SEP 25, you can compare the effects of market volatilities on CVW CleanTech and NESNVX and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CVW CleanTech with a short position of NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and NESNVX.

Diversification Opportunities for CVW CleanTech and NESNVX

-0.36

Correlation Coefficient

CVW CleanTech  NESNVX

Very good diversification

The 3 months correlation between CVW and NESNVX is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and NESNVX 4 12 SEP 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 4 12 and CVW CleanTech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CVW CleanTech are associated (or correlated) with NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 4 12 has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and NESNVX go up and down completely randomly.

Pair Corralation between CVW CleanTech and NESNVX

Assuming the 90 days horizon CVW CleanTech is expected to under-perform the NESNVX. In addition to that, CVW CleanTech is 8.08 times more volatile than NESNVX 4 12 SEP 25. It trades about -0.09 of its total potential returns per unit of risk. NESNVX 4 12 SEP 25 is currently generating about -0.2 per unit of volatility. If you would invest  9,980  in NESNVX 4 12 SEP 25 on September 30, 2024 and sell it today you would lose (202.00) from holding NESNVX 4 12 SEP 25 or give up 2.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	45.31%
Values	Daily Returns

CVW CleanTech  vs.  NESNVX 4 12 SEP 25

CVW CleanTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CVW CleanTech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NESNVX 4 12

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 4 12 SEP 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CVW CleanTech and NESNVX

The main advantage of trading using opposite CVW CleanTech and NESNVX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech position performs unexpectedly, NESNVX can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NESNVX will offset losses from the drop in NESNVX's long position.

The idea behind CVW CleanTech and NESNVX 4 12 SEP 25 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.